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Is Your Packaging Prepared for the Challenges of Club Store Distribution?

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If your company uses major retailers like Target or Walmart to distribute consumer goods, you are well aware of large retailers' challenging demands.

Design and packaging customization requests that can strain your pipeline or large purchase orders with short turnaround times demonstrate the flexibility required from major retail partners.

Distribution through club stores creates similar demands but on a much more intense level. Costco, Sam'sClub and BJ's allow their customers to save by purchasing large volumes of products at one time. In fact, the entire club store experience is built around offering shoppers bulk quantities at discounted prices.

However, for club stores to offer those deeply discounted prices, they must carefully manage their cash flow and margins, a value proposition that translates back to the supplier in the form of substantial purchase orders with tight demands.

Club stores generally don't want to receive inventory until the very last minute. Often, they will expect your product to be retail-ready when it arrives at the store. Upon arrival, your product should be packaged for immediate display, as most club stores do not want their in-store employees to be responsible for assembling your pop-up displays.

The entire business model of club stores requires that they partner with reliable and consistent suppliers. You will have difficulty achieving success in the club store world if you or your packager can't meet these demanding requirements. Below, we'll discuss what to expect when working with a club store partner and tips on how you can make the most of the opportunity.

Club Stores: Onboarding

Just gaining shelf space at a club store is difficult, but receiving your first purchase order is only the beginning of the challenge. The more challenging part is proving that you are a reliable partner who deserves to be in the store. If the club store loses faith in your capacity to deliver, you may quickly find that the store has given your space to a competitor.

Typically the process begins with anapproximately eight-week trial run. During this time, the club store will test the sales appeal of your product, usually by stocking your product in a limited amount of test stores throughout the country. They may also give you prime shelf space, such as an in-aisle display or endcap to give your product more visibility.

Throughout the trial run, the club store will evaluate your product on a few factors, such as your appeal to consumers. Are club store members purchasing your products? Attractive and thoughtfully designed packaging will play a critical role in consumer purchasing decisions. You will often find that the club store will have specific thoughts and requirements regarding your design.

The club store will carefully analyze your ability to deliver, reviewing the following questions:

  • Are your shipments arriving on time as scheduled? Club stores don't want the inventory to come late or to receive shipments too early. Receiving inventory promptly at the requested delivery time is key.
  • Are your products arriving in retail-ready packaging? For instance, if you have an island, the club store may request that your packaging be pre-stocked in the display so club store employees can simply wheel the entire display on a pallet to its final destination. Your goal with club store packaging should be minimal to no in-store assembly required.
  • Are you designing your packaging elements with sustainability in mind? Club stores can negatively view excess materials, and they definitely don't want to deal with your packaging waste. Again, the club store business depends entirely on its ability to minimize costs. If your company can help them achieve that goal, the business will view you as a preferred partner.
  • How quickly can you implement changes? You may find that the club store wants to test various types of packaging during your trial run. Stores may ask you to switch from a pop-up to an in-aisle display or a specific kind of end cap. Or, the club store may require packaging in different colors or shapes.
  • How quickly can your team pivot and deliver a new solution? You will start to receive complete purchase orders for distribution through a greater number of stores if you can successfully make it through the trial run, so this exercise is critical. Upon successful completion of your trial run, you can expect volume to increase sharply. You must be able to quickly turn around a high quantity of products, handle possibly challenging demands for customization and adhere to tight delivery deadlines.

If you can meet these challenges, you'll likely see continued orders in the future, boosting your revenue, cash flow and profitability. If you can't meet the club store's demands, you may lose your shelf space.

Club Store Packaging Design

Club Store Packaging Design

While traditional retail locations have in-store advertising, club stores typically lack product advertising. Therefore, your packaging for club stores will have to let your products speak for themselves. Customers see many goods in a single shopping trip, so ensure your design follows the five-in-five rule — your product has five seconds to catch a shopper's eye within five feet of the pallet. 

To follow the five-in-five rule, consider the following design techniques: 

  • Follow a color pallet: Secondary and primary product packaging color should remain consistent. You should create a strong color block based on a shared palette to catch customers' eyes. 
  • Practice billboarding: Because of the lack of in-store product advertising in warehouse-like club stores, you can create your own billboards by positioning products to make a unified, larger image. Rather than designing each product package to stand alone, consider how design can connect to create a continuous whole. Focus on creating images and logos rather than text during this process, as customers will more quickly identify your product. 
  • Design for branding from multiple angles: Five-sided branding ensures customers can see every angle of your product on display. You should even focus on the top of panels, as customers will be able to see all angles of your product when others remove products from the display for purchase. 

Beyond your product design, make sure you understand each club store's specific product requirements. All packaging should be durable. Be cautious of the amount of plastic you use, as most club stores typically only allow carded and trapped blister packaging.

You should also design packaging so club store employees can quickly disassemble it. Interior partitions to protect products should maintain structural integrity but should not be glued to the package for easy removal. 

Work With a Packaging Partner

Your packaging plays a crucial role in your club store experience. Appealing, high-quality and well-engineered club store packaging can help your product catch customers' attention. However, your packaging process is just as essential to help you retain shelf presence and maintain credibility with the club store.

Working with a packaging partner who has club store experience is one of the most effective methods to achieve success in a club store, especially if your packager has a proven track record with the specific club you are trying to work with.

For example, a packaging partner who has worked with Costco in the past will know the ins and outs of Costco's trial run process and have experience meeting its customization needs and deadlines. With this type of knowledge, your packaging partner can help you anticipate and plan for challenges before they present themselves.

Lastly, fulfillment is almost just as important as the production and packaging design. More than likely, you'll want to warehouse your product at your packaging partner's facility to save time and money, so ensure that your packager has the capacity and storage space to pick and pack your products quickly and efficiently.

This step will provide you with the flexibility to meet the club store orders for particular mixes of packaging and product. When the purchase order comes in, your packaging partner simply has to pull the required product bundles and package them to the custom specifications.

Partner With QPSI for Your Packaging Solutions

The bottom line is that the efficiency and quality of your packaging could determine your success with club store distribution. You work hard to win the club store business — don't let your packaging hinder your opportunity! QPSI has decades of experience serving club stores. Contact us and learn how our expertise can help make your product a success.

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